For many years the credit card balance transfer wars have been raging with offers getting longer and longer.

This has seen the introduction of the ‘Balance trasnfer fee’ which is a charge made by a credit card company when you transfer a balance to them.

Usually you wouldn’t do this unless there were other benefits and in most cases this would be to take advantage of a lengthy 0% balance transfer period.

Virgin have recently increased their balance transfer offer from 12 to 13 months which is currently the longest offer on the market. In line with the extension of their offer they have also increased the balance transfer fee froom 2% to 2.5%.

Doesn’t sound a lot but if you have a balance of £5,000 that’s £25 more you’ll be paying for one more month at 0% than if you were charged 2% for a 12 month balance transfer. So is it worth it?

An approximate calculation using the rate of 15.9%

£5000 x 0.159 = £795 (yearly APR rate)

£795 / 12 = £66.25 (monthly interest fee)

You pay £25 to save being charged £66.25 in interest so still save: £41.25